May 23, 2019
Information & technology has served the human race by redefining the way individuals, family, business and government conducts itself by providing accurate and fast services. With ever-increasing demand in rail travel, the present state of network is inadequate to meet the overgrowing demand. The demand could be met through the development of optimum solutions embedded with new technologies. Railway administration across the world rely of efficient and reliable asset operations and railway i...
Information & technology has served the human race by redefining the way individuals, family, business and government conducts itself by providing accurate and fast services. With ever-increasing demand in rail travel, the present state of network is inadequate to meet the overgrowing demand. The demand could be met through the development of optimum solutions embedded with new technologies. Railway administration across the world rely of efficient and reliable asset operations and railway infra. ICT has helped in providing efficient solutions in assets and operation management for railway companies.
Now a days, the major innovations in the rail sector are based on integration technologies referring to analog components combining with digital ones (computerized equipment, servers, and sensors interconnected by more and more open communication networks). Additionally, owing to heavy spending by government and private organizations, there has been rising demand by users for full functioning digital communication and information transmission while traveling.
Trends in IT Spending in Railways
The IT spending in railways market is expected to grow at CAGR 9.8 % with market size worth USD 254 billion in 2020 over the forecast period 2019–2026.
The IT spending in railways market is expected to witness significant growth during the forecast period 2019–2026. Internet of Things, the phenomenon of interconnected devices and internet, is driving the growth of the rail industry further. Smart onboard monitors capture and store the crucial data in real time. Moreover, it allows the operators to analyze and identify the problems regarding delays and facilitate automated and preventive maintenance. For instance, Sweden commuter train relies on commuter prognosis to smoothen its operations, which help them to analyze data up to two hours in advance. It enables forecasting of disruptions and allows control center to monitor the glitches that result in a delay.
Today, railway engineering technologies are not just improving but also transforming the way we move around. One of the promising technologies in the offering is the hyperloop futuristic train concept introduced by Elon Musk’s SpaceX and Tesla. This futuristic train will travel at more than 1000 km/hr with the help of renewable energies. The concept allows hyperloop to travel through the low-pressure tube where it levitates with the support of permanent magnets. However, this kind of complex technological feat cannot be accomplished without heavy IT investment in its infrastructure.
The IT spending in railways market is segmented by type, application, and region.
On the basis of type, the IT spending in railways market is segmented by service, software, and hardware. New train and railway development are involving more electronics, automated train protection systems, automated train protection systems, automatic train operations, driver and passenger information systems, and internet data services for passengers. For instance, Freight operations information system (FOIS) application software consist of Rake Management System (RMS) and Terminal Management System (TMS), which keep records of wagons/rake by reporting rake information, crew assignment, load information, consignment details, train arrival and departure, forecast, correction in rake composition, placement, releases, and maintenance activities.
Based on application, the IT spending in railways market is segmented by train design, train inspection, track management, traffic management, and passenger management. Digital evolution in railways is primarily changing trains infrastructure and its core processes are handled by the rail industry. Autonomous driven trains, smart maintenance, and interconnected logistics have become a reality today. For instance, digital interlocking for controlling rail traffic is one of the important innovations to locate trains in real time and adjust their speed. Decentralized technological control has helped in managing the extensive rail network independent of location.
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Geographically, the IT spending in railways market is segmented into North America, Europe, Asia Pacific, Latin America and Middle East & Africa (LAMEA).
North America needs significant investments to meet growing demand and growth forecast of the in-freight rail industry. As per the forecast of the U.S. Department of Transportation, freight railroad demand would increase to 88% by 2035. Apart from this, American Association of Railroads estimated that investment of about USD 148 billion is required to meet the volumes of the year 2035 based on existing infrastructure. This estimate addresses the only expansion of lines and facilities and does not account for maintenance of lines or stock.
The European railway infrastructure has been playing a significant role in minimizing its impact on the environment by managing its energy-related emissions to provide a reliable service and utilize the resources in a highly efficient and effective manner. For instance, increased adoption of hybrid propulsion system to introduce operational range and flexibility in energy storage and reducing the dependency on diesel fuel is one of the key challenges being addressed to focus on environment-friendly measures.
Asia Pacific sees rapid growth and urbanization with India and Vietnam are the fastest growing countries. As per the United Nations ESCAP, 4.2 billion people reside in the Asia Pacific (APAC) region, which constitutes over 61% of the world population. Therefore, there is an increasing need to develop transport services. Asia Pacific is investing heavily in railway development; there are numerous railway projects in development or construction, representing billions of dollars in investment and spending. Many countries are deploying advanced technologies to make railway safer and efficient this region. For example, in January 2018, Indian Railway announced the plan to deploy cameras on drones or unmanned aerial vehicles (UAVs) for a range of activities, including monitoring and maintenance of tracks and other railway infrastructure. Among all countries in Asia Pacific, Japan has been a pioneer in rail development as well as bringing innovative technologies and continues to be a global leader.
The demographic pressure is most evident today in the urban areas of the South American region. Today, 70% of the South American population resides in urban areas. The growing urbanization has influenced public transit. Railway operators have started adopting digital technologies in upcoming projects to promote the highest levels of safety and reliability. For instance, The Central Bi-Oceanic Railway Corridor is a multinational project aimed at connecting Atlantic and Pacific coasts across central South America. The project is 3,800 kilometers long and is estimated to cost USD 10 billion. This project is driven by technical developments in modern technologies such as internet of things (IoT) technology and IT system and a movement towards computer‑based management, control and communication systems.
Some of the major players in IT spending in railways market are Accenture (Ireland), Altran Technologies S.A. (France), ALTEN SA (France), IBM Corporation (U.S.), SAP SE (Germany), ABB Ltd (Switzerland), ALE International (France), ALSTOM Holdings (France), Ansaldo STS (Italy).
IT Spending in Railways Market Segmentation
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Market concentration of top five players
Analysis of IT spending in railways component market by regions, players, countries